Abstract

Investment and economic growth are very crucial for any country. Investment accelerates economic growth and economic growth also influences investment in further increment. There is a strong bidirectional causality between these two variables. This paper investigates the causal relationship between the investment and economic growth of Bangladesh in the period of 1984-2021, utilizing a Johansen Co-integration Test and Granger Causality Test. In light of writing survey, the model additionally incorporates total investment, current GDP, total consumption and export. The study found that all variables are stationary by implying Augmented Dickey Fuller Test and Phillips-Perron Test. Johansen Co-integration Test shows that there is a long run relationship between GDP and investment, which is highly significant. To put in other words the evidence bidirectional causality between economic growth and investment in the long-run indicates that both economic growth and investment reinforce each other in a longer term perspective.